Drug Charity Sues U.S. Over Restrictions on Donor Communications

January 9, 2018

DOJ is investigating drug-makers’ financial support of patient-assistance charities

A U.S. charity offering assistance to patients for their out-of-pocket drug costs has sued the federal government over restrictions on its ability to communicate with drug-makers who donate to it, according to a Reuters report.

The charity, Patient Services, Inc. (PSI), filed the lawsuit in federal court in Richmond, Virginia. It comes amid a Justice Department investigation into drug-makers’ financial support of patient-assistance charities.

Drug-makers are prohibited from subsidizing copayments for patients enrolled in Medicare, but they may donate to nonprofits providing copay assistance as long as the charities are independent. Amid increased attention to rising drug prices, concern has arisen that drug-makers’ donations to such charities may be contributing to price inflation.

In its lawsuit, Midlothian, Virginia-based PSI said it had long operated under an advisory opinion issued by the U.S. Department of Health and Human Services Office of Inspector General (OIG) that essentially gave it approval to help Medicare patients. But PSI said the OIG imposed new guidance in 2017 requiring it to refrain from engaging in conversations with drug-makers that are donors to obtain information about issues like patient populations and drug costs used to create programs.

“The OIG’s restrictions on PSI’s communications with donors are unreasonable, unfair, and unconstitutional,” PSI’s general counsel, Neil Millhiser, said in a statement.

The agency declined to comment.

The Justice Department has been investigating drug-makers’ support of charities such as PSI. The investigation led United Therapeutics Corp. in December to pay $210 million in claims related to its support of one charity. That charity, Caring Voice Coalition, last week said it will not provide financial aid in 2018 after the inspector general revoked its advisory opinion.

In September, the Justice Department alleged a PSI donor, Aegerion Pharmaceuticals, Inc., violated an antikickback law by using PSI to defray copayments for patients prescribed an expensive cholesterol drug, Juxtapid (lomitapide). The government alleged that PSI promoted its ability to create a “reimbursement vehicle” for Aegerion, which was able to eliminate price sensitivity for Juxtapid via an Aegerion-supported fund that PSI created.

Aegerion, a unit of Novelion Therapeutics, Inc., agreed to pay $40.1 million to resolve probes into its promotion of Juxtapid. PSI was not charged and denies funneling funds for manufacturers.

PSI has said it helps hundreds of thousands of patients, but expects to help 2,000 fewer people in 2018 due to a 17% drop in its operating budget caused by reduced donations.